ACCA Applied Knowledge · Financial Accounting · Cash
Which of the following items on a bank reconciliation requires a journal entry in the company's general ledger?
Bank charges that appear on the statement but not in the cash book need a journal entry, debiting bank charges expense and crediting bank. Unpresented cheques and uncleared lodgements are only timing differences that are reconciled without any ledger entry.
- AA cheque issued to a supplier that has not yet been presented
- BReceipts banked on the last day of the month but not yet credited by the bank
- CBank charges shown on the bank statement but not in the cash bookCorrect
- DA cheque from a customer deposited and cleared in the following month
Explanation
Bank charges are a transaction the company has not recorded, so the cash book and ledger must be updated: Dr Bank charges expense, Cr Bank. Unpresented cheques and outstanding lodgements are timing differences and need no entry; they simply reconcile the two balances.
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